Toyota no longer No. 1

Bloomberg

Toyota Motor Corp is facing a Japan problem. The company, based in Toyota City, Japan, was outsold by General Motors for the first time in six quarters, as deliveries in Japan extended their decline after government incentives for fuel-efficient models expired last year.

Toyota and its subsidiaries sold 2.48 million vehicles during the quarter ending last month, just shy of the 2.49 million that Detroit-based GM disclosed earlier this month. Japan’s largest automaker sold 8.4 percent fewer vehicles in its home market last quarter.

Toyota’s decline in Japan car sales shows a rare weak spot for a company that is forecasting its biggest profit in six years and whose stock has gained 54 percent this year. Japanese vehicle sales have fallen steadily since the asset bubble burst in 1989, with temporary boosts from government subsidies.

“The decline in Japan will continue,” said Jun Nokuo, an analyst with researcher RL Polk & Co in Tokyo.

“It is an aging society and the population is shrinking. At the same time, the popularity of cars is declining because public transportation is easy to use,” Nokuo said.

Toyota’s sales in the first six months of this year dropped 1.2 percent to 4.91 million units. GM sold 4.85 million vehicles in the first half and Volkswagen delivered 4.7 million, according to the companies.

Toyota has been projecting since late December that sales will climb to almost 10 million units — a milestone no automaker has ever breached — next year.

Japan’s largest manufacturer has an ever-bigger buffer in the yen, whose decline has been bolstering the value of Japanese exports. The yen has weakened more than 12 percent against the US dollar this year and last week traded at ￥100 versus the greenback.

In 2008, Toyota ended GM’s 77-year reign as the world’s largest automaker, holding on to the top annual sales spot until 2011, when it surrendered the title after production was disrupted by natural disasters in Japan and Thailand.

Sales rebounded last year, allowing Toyota to deliver 9.75 million units and regain its global No. 1 title as the recession receded, while the carmaker added products and was spared from disruptions from natural disasters.